A California federal judge has officially granted View Inc.’s dismissal request for a lawsuit alleging federal securities law violations following the company’s move to go public in 2021. Stadium Capital, formerly CF Finance Acquisition Corp., introduced the suit.

A California federal judge has officially granted View Inc.’s dismissal request for a lawsuit alleging federal securities law violations following the company’s move to go public in 2021.

Stadium Capital officials argued that View made material misrepresentations to investors in, among other filings with the U.S. Securities and Exchange Commission, its Dec. 23, 2020, de-special purpose acquisition company (SPAC) registration statement. The statement included two amendments concerning a materially misstated and understated warranty accrual related to View’s “smart panels.”

Court documents stated that on Aug. 16, 2021, View announced it had begun an independent investigation concerning the “adequacy of the company’s previously disclosed warranty accrual.” Due to this news, View’s share price fell $1.26, or over 24%, to close at $3.92 per share on Aug. 17, 2021, on unusually heavy trading volume.

Stadium Capital officials argued that View’s trading prices declined as the market absorbed the company’s revelations regarding inaccuracies in its financial statements for 2019 and 2020, specifically concerning liabilities associated with warranties. They alleged that View and others represented suffered significant losses and damages due to its wrongful acts and omissions and the decline in the market value of its securities.

Subsequent announcements regarding the repercussions of the company’s findings on its financial condition continued to impact trading prices.

In her dismissal ruling, U.S. District Judge Beth Labson Freeman determined that Stadium Capital could not attribute its losses to the August 2021 announcement. She wrote in her order that Stadium Capital “sold its stock before the truth of the underlying falsehood was revealed. Put differently, because Stadium Capital sold its shares before the truth was revealed, it was not injured by the alleged misrepresentations.”

In May 2023, Freeman approved View’s dismissal request for similar reasons but allowed Stadium Capital to replead its claims.

The move to permanently dismiss the investor class action suit follows the news that View will file for Chapter 11 bankruptcy and go private. View officials say they expect court approval within 45 days. Once the move is approved, View will emerge as a privately held company with a reorganized board of directors.

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